There isn't one right loan for everyone. Explore three common programs, then let's talk about the one that makes sense for you.
01
A familiar, flexible option
Conventional
Conventional Mortgages are most common for clients with credit scores over 700-720, but are available for credit scores over 620.
3–5%Down payment example
620+Credit score in guide
Down payment
3%-5% minimum down payment. First time buyer (defined as a person who has not had their name on a mortgage or deed of any property in the last 3 years) options are available with as little as a 3% down payment. If not a first time buyer, the minimum down payment is 5% (for primary residences).
Credit
Available for credit scores over 620; most common for clients with credit scores over 700-720.
For buyers putting 20% or more down, there is no PMI (Private Mortgage Insurance).
Maximum debt to income ratios vary depending on other qualifying factors, but offer financing options for buyers with debt to income ratios up to 45%-50% (including estimated new mortgage payment).
02
A little more flexibility
FHA
FHA Mortgages offer more flexible financing options for buyers that have lower credit scores or carry increased debt.
3.5%Down payment example
580Credit score in guide
Down payment
3.50% minimum down payment.
Credit
580 minimum credit score to qualify (still dependent on previous credit history).
Maximum debt to income ratios vary depending on other qualifying factors, but offer financing options for buyers with debt to income ratios up to 55% (including estimated new mortgage payment).
PMI is required for between 11 years-the life of the loan depending on the initial down payment.
You do not have to be a first time buyer to qualify for an FHA mortgage.
03
For those who have served
VA
VA mortgages are available for eligible Veterans, Servicemembers and surviving spouses.
0%Down payment example
580Credit score in guide
Down payment
0% down payment options with no PMI and lower closing costs.
Credit
580 minimum credit score to qualify.
Debt to income ratio thresholds are dependent upon other qualifying factors.
Terminology note: the document calls FHA mortgage insurance “PMI.” FHA mortgage insurance is generally referred to as mortgage insurance premium (MIP). The figures above are source-guide examples, not universal agency or lender requirements.
MORE THAN THREE POSSIBILITIES
First-time buyer? Thinking about assistance?
The guide also discusses USDA and down-payment assistance in the budget conversation. Eligibility and assistance terms depend on the program, your location, and your circumstances.